5 Secrets to Building a Profitable Landscaping Business

You can drive your landscaping business to new heights and greater profits. Even if you are a very small-scale operation, these five things can help you succeed. The key to making your landscaping business profitable is to start thinking like a bigger operation.

Here are five ways to increase your profits this year:

1. Encourage Employee Growth

Whether you have one employee or a dozen, nurturing them and helping them grow will benefit you in the long run. When you encourage the professional and educational growth of your employees, you make the people invested in your business more valuable.

Ways to encourage employee growth:

Career development assistance

Encouraging certifications or skilled trade programs

Providing on-the-job training

Why should you invest in the growth of your employees? To keep the best ones with you. Maybe one of your employees wants to go to school part time to learn more about business, and another wants to join a landscaping certification program. You have two options:

You can worry that these employees will eventually leave you to work for the competition or start their own businesses, and refuse to work around their schedules.

Or...

You can show them you’ve got their back by accommodating their programs and school schedules, and offering financial support or incentives.

In one of these situations, you will end up with an employee who feels invested in your company’s success, and has the new skills and education to help your business grow and succeed.

Which one do you think will result in more profits in the long run?

2. Measure Everything

Do you track productivity on the job? Measure your ratios of leads to closed sales? Track referrals and repeat customers? The more metrics you can track and measure in your landscaping business, the more opportunities you have to increase profits.

What are some of the metrics you should measure and track?

Sales - Track your ratio of leads that become closed sales

Clients - Customer surveys are a great way to gauge customer satisfaction. Client turnover can also be measured, as well as services sold to each client.

Production - Non-billable hours where you pay your employees but aren’t making any profits, overtime, and other metrics that impact your costs should be tracked and measured.

Balance Sheets - Keeping track of the average outstanding accounts receivables (money owed) is important, and can also be an indicator of client satisfaction.

Cash flow - Profits and cash flow are not always the same thing. Keep track of the operating cash flow you have monthly or even weekly. After you make all of the payments for inventory, labor, and investments, and collect from all of your clients, how much cash is your business bringing in?

3. Practice Risk Management

Risk management protects your business from losses, but did you know that you can use this practice to increase profits, as well?

When you practice good risk management, you will help your business continue to operate with better cash flow and stability. When your financial reports reflect this effort, it is easier to get credit and investors to help you grow.

“The rewards of risk management are all linked together: good cash flow leads to stability, which leads to good credit, which leads to longevity.” - Small Business Association

Using risk management practices, which can include protecting your landscaping business with the right contractor insurance policies, will protect your business from loss and help you grow.

4. Invest in Website Development, SEO, and Social Media

You may have built your business up through word-of-mouth and referrals, but if you are going to experience true growth and profitability, you will need to invest in your web presence. And it’s not enough these days to throw up a brochure-style templated website and think leads will come your way, either.

Creating your website is just the beginning.

Your website, as well as your social media accounts, need to be optimized for search engines. This ongoing practice is known as SEO. Customers are searching online for your services, but if you don’t have a great website that is optimized and regularly updated, they probably won’t find you. This task is an important part of building your business, and an investment worth making if you want to stay competitive today.

5. Run Lean

Running lean doesn’t refer to your current exercise program. Lean methodologies are a systematic method of identifying and reducing waste within your business.

It’s all about efficiency.

When you run lean, you create more value for your customers with fewer resources.

Here are some areas that you may be able to lean-out in your business:

Transportation - is there unnecessary movement of parts or materials between processes?

Waiting - are there people waiting for a work cycle to be completed?

Overproduction - are you producing more, or faster, than the customer is demanding?

Inventory - do you have materials and equipment that are not needed or used?

Lean methodologies, tracking key metrics, investing in your web presence, practicing risk management, and helping your employees grow with your company may sound like a business plan for a major corporation, but they apply to the success of your small business, too.